- The Bank of America (and its wholly-owned subsidiary Merrill Lynch) are set to pay the U.S. government $179 million in dividends on two issues of TARP money they received. The dividends will be paid February 17th. We think that over time, and especially when the TARP preferreds are due and will be paid back to the government, the cost of these bank “bail outs” will shrink dramatically. There are even those who think the government will end up making money on them.
- If you live in Northern or Central California , you’ve probably heard of Westamerica Bank ($4 billion in assets). They had such a good 4th quartet that they just raised their dividend. Their returns, their margins, and their credit quality have always been terrific. Not all banks are doing poorly.
- Here’s a sort of funny name: Beehive Credit Union, in Salt Lake City . They were going to convert to a mutual savings bank, but they decided banks were in a horrible situation and had bad reputations, so they decided to stay a credit union.
- The latest data on hotels show that RevPAR dropped over 16%. RevPAR means Revenue Per Available Room, and it means just what it looks like. Take the number of rooms that are available, and divide that into total revenue. Expect RevPAR to drop throughout 2009 – so it’s a good time to negotiate when you call for reservations.
- The BofA has dumped John Thain, head of Merrill Lynch. He spent over $1 million remodeling his office, including $30,000+ for a toilet on legs, whatever that is. When you’re in the public eye, the old cliché is to never do anything that would embarrass you if it showed up in the morning news.
- Look at how much these market caps have dropped in just a few months:
|
Sept 30, 2008 |
Jan 20. 2009 |
|
|
J.P. Morgan Chase |
$174 billion |
$67 billion |
|
Bank of America |
$159 billion |
$32 billion |
|
Wells Fargo |
$124 billion |
$60 billion |
|
Citigroup |
$112 billion |
$15 billion |
|
U.S. Bancorp |
$63 billion |
$27 billion |
- Pennsylvania-based Firstrust Savings Bank entered issued a $10 million warehouse line to 1st Republic Mortgage Bankers in April 2008; they recently discovered that the mortgage lender had double hypothecated, i.e. the assets that had been used as collateral for Firstrust's loans had also been pledged to a second creditor. Usually, people go to jail over this. We can’t believe people think they’ll get away with it.
- How many letters does Dear Abby receive per week? If you guessed 10,000 letters, you guess right.
- Remember Redwood Trust? Well, January 27 is a big day for them and, perhaps, for the overall mortgage industry. Redwood is set to close on the sale of 23 million shares of common stock at $11.25 each. If it goes smoothly, it will be a vote of confidence in the mortgage industry, and may even hasten the return of the jumbo market. Mostly, though, it will be a big vote of confidence in Redwood Trust, one of the most intelligently run mortgage REITS of the past 15-20 years.
- And what about Super Bowl-bound receiver Larry Fitzgerald? Aren’t his catches unbelievable? The Wall Street Journal had an article on how he manages to catch so many passes with his eyes closed, and yes, there were photos of him making circuslike catches with his eyes shut. The article had explanations from research scientists, ophthalmologists, and brain researches. When interviewed on how he does it, Fitzgerald said “I don’t know either, so if you find out, let me know.” We like this guy!
- We get e-mails from people referring to our daily newsletter, our weekly newsletter, and even our monthly one. The reality is that we try to put it out twice a week, with a few exceptions here and there. We went a few weeks without one in late December and have been only doing them once a week in January. We hope to get back to twice a week within a month or two. Thanks for your patience.
- Who were the youngest baseball players to hit over the most home runs in a single season? The great Eddie Mathews hit 47 at age 20, Mel Ott hit 42 homers at 20, and Frank Robinson hit 38 at the same age. These were three of the greatest hitters of all time.
- We were just looking through our bookshelves for a book to read and we saw The Amazing Adventures of Kavalier and Clay by Michael Chabon. That may be the most engaging novel we ever read, so if you’re looking for something fun to read, check it out.
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